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Introduction to Financial Accounting
Final Exam Review Sheet
• 41 multiple choice questions x 2.5 points each = 102.5 points possible (out of 100)
• The exam will be taken online in Connect.You have 2 hours and only 1 attempt to take the exam.
• While notes can be used, the exam is timed so you should study to be prepared.As you study, think about application of the concepts in real-world situations.
Chapter 8 Topics
• Costs included in the capitalized price of fixed assets
• Purpose of depreciation
• Be familiar with the depreciation expense and accumulated depreciation accounts.
o What is reflected in each?
o Where do they appear in the financial statements?
• Calculation of a long-term asset’s net book value and how it changes over time
• Calculation of straight-line depreciation (including prorating the depreciation amount in the first and last year of the asset’s life)
• How to record depreciation and the impact on the financial statements
• Calculation of depreciation expense, accumulated depreciation, and net book value throughout an asset’s life (pay close attention to the dates and what you are asked to calculate!)
• Ordinary repairs and maintenance that are expensed vs. improvements that are capitalized
Chapter 9 Topics
• Structure of the classified balance sheet and accounts that belong in each section
o Be able to classify current vs. long-term assets and liabilities
• Calculation and interpretation of the current ratio
Chapter 12 Topics
• Three categories of the statement of cash flows and the content of each
• Structure of the statement of cash flows (indirect method) and cash inflows and outflows for each section
• How the statement of cash flows can indicate the financial health of a company
• Be able to evaluate a company’s cash flows from operating, investing, and financing activities and make conclusions on the financial success of the company.
Chapter 13 Topics
• Definition of debit and credit
• Which accounts increase with debits?With credits?
• How to analyze and record transactions (which accounts, increasing or decreasing, debit or credit)
o You will see multiple transaction analysis and journal entry problems on the exam.You should understand how accounting events impact the accounting equation and financial statements.
• Purpose of the general ledger